At the FATF’s plenary session in February 2021, the Cayman Islands was placed on the list of countries subject to increased monitoring for anti-money laundering, counter terrorist financing and counter proliferation financing purposes, also known as the “FATF grey list”. For the avoidance of doubt, Cayman was not, and never has been, on the FATF’s blacklist of “non-cooperative jurisdictions” or “high risk jurisdictions subject to a call for action”. The FATF grey list was also not concerned with tax transparency or international cooperation, for which the Cayman Islands receives high marks.
An action plan, supported by the Cayman Islands financial services industry and the Cayman Islands Government, was agreed upon and implemented to address the following:
- “applying sanctions that are effective, proportionate and dissuasive, and taking administrative penalties and enforcement actions against obliged entities to ensure that breaches are remediated effectively and in a timely manner;
- imposing adequate and effective sanctions in cases where relevant parties (including legal persons) do not file accurate, adequate and up to date beneficial ownership information; and
- demonstrating that they are prosecuting all types of money laundering in line with the jurisdiction’s risk profile and that such prosecutions are resulting in the application of dissuasive, effective, and proportionate sanctions.”
The FATF congratulated the Cayman Islands for their significant progress commenting that Cayman had implemented an action plan to resolve swiftly the identified strategic deficiencies within the agreed timeframes.
Separately, the EU Commission maintains a list of “high-risk third countries which have provided a written high-level political commitment to address the identified deficiencies and have developed an action plan with FATF”. Inclusion on the FATF grey list therefore meant more-or-less an automatic inclusion on this European Union AML list (“EU List”). Now that the Cayman Islands has been removed from the FATF grey list, it is expected that it will also be removed from the EU List when it is next up for consideration, likely in Q1 of 2024.
Now that the Cayman Islands has been removed from the FATF grey list, the jurisdiction is poised to continue its success. Appleby takes an optimistic view of the future for the jurisdiction.